The political crisis in Venezuela looks to be reaching tipping point, with some commentators arguing that the country is already entering into a transition process toward the end of authoritarian socialist rule.

Juan Guaido, a 35-year-old lawmaker, has emerged as the plain-speaking, clear-thinking leader that opposition forces have been lacking.

The idea that unfair election procedures had reduced President Nicolas Maduro to de facto rather than de jure head of state has taken root.

The European Union and scores of nations have followed US President Trump’s lead by recognising Guaido as Venezuela’s legitimate president through a transition process.

There are some hard choices facing the two men claiming to be president.

Maduro seems to have finally lost the mass working class support that was won by the charismatic rhetoric of his predecessor, President Hugo Chavez, and since sustained by subsidised social assistance.

Opposition backing for an amnesty law, and a high-stakes gamble over bringing humanitarian aid into Venezuela, could be enough to weaken military loyalty to a regime that has done much damage to the country’s economy.

Maduro and his embattled inner group probably anticipated this moment when they handed control of key sectors of the oil industry to the military two years ago, but US sanctions and a near-collapse in production means there is just about nowhere else to go to obtain the cash that Maduro needs to govern.

Rumours of a possible Russian-brokered flight to exile in Cuba were circulating as Upstream went to press, but until Maduro makes a significant move to concede, there remains a risk that he will try to use the military to hold back change by force.

There are also challenges for the opposition. Effective delivery of promised aid may be difficult as long as Maduro retains the loyalty of the armed forces.

Sanctions always have the potential to hurt the population and, in the event of fuel shortages, could trigger risking civil strife

Despite these risks, the forces lining up against Maduro’s regime seem critical, and analysis is beginning to shift toward the question of what comes next.

One of the key questions is - how can a transitional or post-transitional administration go about re-building the shattered oil industry?

Venezuela’s status as owner of the world’s biggest reserves does not always take account of how much ground has been lost in terms of maintenance and reservoir management.

There is also the question of how vast reserves of extra-heavy oil will find a cost-effective way on to the emerging global energy matrix.

That said, Venezuela’s oil and gas sector is so prolific that it is not difficult to imagine investments pouring in.

In this new scenario, there are likely to be battles with what is left of the socialist movement over whether PDVSA should be privatised

Regime change will also pose questions to Maduro’s backers on the international scene.

Independent assessments suggest China is still owed close to $23 billion in oil-backed loans.

In this sense, future Venezuelan governments would be wise to discourage any ideological backlash.

In the Venzuela of the future, China will probably have to fight its corner in a more competitive environment than was the case under the socialist regimes.

However, it should still have a place at the table in the contest for oil assets, and also in seeking to provide Venezuela with the capital and expertise to rebuild the country’s infrastructure.

Weekly

Venezuela at the tipping point